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Ghana loses $100m every year at the ports to container demurrage

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The Chairman of the West African branch of the Institute of Chartered Shipbrokers (ICS), Mr Fred Asiedu-Dartey, has revealed that Ghana loses $100 million annually to container demurrage at its ports and calls for urgent action to stem the tide.

He noted that about 80% of liner cargoes at the ports still remain uncleared after the allowable seven-day free time, which shippers are fully aware of, leading to avoidable demurrage costs charged by shipping agencies

Mr Asiedu-Dartey disclosed this Tuesday July 4 in Accra in his welcome address at an ICS maritime stakeholders’ seminar organised by his outfit under the theme “Container Demurrage; Its administration and impact on Ghana’s Maritime Industry.”

He added that shippers also incur additional costs by paying detention charges when they keep containers outside of the terminal longer than the agreed free time.

From left to right : Ms Julie Lithgow, ICS Director; Dr Kofi Mbiah,former CEO of GSA; Mr Carlos Ahenkorah,MP,a deputy minister of Trades and Industry; Mr Karl Franz,Chairman of ISC Membership Committee; and Mr Fred Asiedu Dartey,Chairman of the West African Branch of ICS and PRO of GSA.
From left to right : Ms Julie Lithgow, ICS Director; Dr Kofi Mbiah,former CEO of GSA; Mr Carlos Ahenkorah,MP,a deputy minister of Trades and Industry; Mr Karl Franz,Chairman of ISC Membership Committee; and Mr Fred Asiedu Dartey,Chairman of the West African Branch of ICS and PRO of GSA.

The Public Relations Officer of the Ghana Shippers’ Authority attributed part of the challenge to administrative framework lapses on the part of some operators in the clearance regime which needs clarity: “What happens if containers are returned on a weekend or a holiday? Should what has been generally accepted as further demurrage be properly so described as Detention and consequently attract a lower rate than the Demurrage rate?”, he quizzed.

On his part, a deputy minister of Trades and Industry, Mr Carlos Ahenkorah, MP, added his voice to the call to cut down the cost borne by shippers associated with demurrage and detention charges among others which some shipping agencies are exploiting to their advantage.

Ignorance on the part of shippers due to insufficient information and lack of political will of government to stamp its foot by putting in some drastic measures to arrest the situation is part of the cause of the challenge, he admitted.

On detention charges, Mr Ahenkorah said government is considering an insurance policy measure for shippers  so that they do not directly pay money to shipping agencies but the responsibility will fall on the insurance firm to address any issue that may arise as a result of taking the container out of the terminal.

He took the opportunity to also challenge members of the ICS in Ghana to bring to bear their expertise as shipbrokers to revolutionise the shipping industry for the benefit of the Ghanaian economy.

The Tema West MP expressed his disappointment that Ghanaian shipbrokers are not involved in the shipment of millions of tonnes of Ghana’s cocoa and other natural resources over the years by engaging in charter party services.

He promised to do everything in his capacity to introduce industrial sub-contracting which will allow Ghanaian shipping experts special roles to play in the maritime industry for the country’s development.

The former Chief Executive Officer (C.E.O) of the Ghana Shippers’ Authority, Dr Kofi Mbiah, in a presentation at the seminar recommended some measures to be put in place to mitigate the costs associated with demurrage and detention charges.

He suggested among other things an increase in education to shippers on the situation; full automation  of the clearance processes; improve operational procedures to fast track release of containers; improve technology for the location and tracking of containers; submission of genuine documents by consignees to avoid post entry ; and the   institution of systems for pre-arrival clearance of cargoes.

The Chairman of the Membership Committee of ICS, Mr Karl Franz, noted that demurrage has become an international maritime issue and the “administration of this charge has over time become  very contentious and a major contributory factor to the increasing cost of doing business at the ports and by extension the high cost of imported items.”

He commended the West Africa Branch of the ICS for improvements in its membership base and activities since its inauguration in 2010.

“It is our hope that the activities of this ICS branch would inject new energy in the pursuit of professionalism within the industry. We count on the cooperation and continued collaboration of all stakeholders for improved service delivery that would benefit Ghana’s maritime transport industry in general,” he appealed.

The ISC Director at the Institute’s headquarters in London, Ms Julie Lithgow, in a brief address stated that the demurrage phenomenon is fast making the seaborne trade expensive, a situation which is eroding   the long held belief that shipping enjoyed in the past as a cheaper means of transport of goods.

She added that her outfit is committed to training and supporting people to acquire the necessary knowledge and skills which would be brought to bear on the maritime industry for the economic development of the world.

The ICS is the international professional membership organisation for the shipping industry which comprises of shipbrokers, ship managers and agents    with about 24 branches across the world.

Source: Romeo Adzah

 

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